740.00119 Council/9–2146: Telegram

The Acting Secretary of State to the United States Delegation at the Paris Peace Conference

top secret
us urgent

5019. Secdel 968. For Matthews from Hickerson. Hanc Czech Emb discussed with Gen Connolly OFLC late Sept 20 sale of surplus Zecho. Gen Connolly informed Hanc since this matter being reconsidered by US Govt FLC would carry out standing commitments but make no new ones to Zecho. In accordance with Dept’s suggestions he avoided explanation of reasons for action.

Hanc is visibly disturbed by this development. After meeting with Connolly he endeavored to ascertain from Dept reasons for step and has requested appointment with me Monday for discussion of subject.

Dept desires guidance on course to follow in dealing with Czechs here particularly because of uncertainty re what has been said to their Paris representatives as to cancellation of further surplus property credit. My own inclination is to tell Hanc that US has been forced to halt further sale surplus in view of

Zecho campaign of vilification US objectives and policies especially as expressed in Zecho support of Vyshinsky statement concerning “economic enslavement of Europe through a policy of handouts”.
Recent Zecho attempt to charge US with discrimination in sale of surplus property.
Lack of urgent need for further utilization surplus credit because of improved economic conditions in Zecho.
In this connection attention would be called to proposed contract between Zecho and Rumania for repurchase by Rumania of US surplus obtained by Zecho amounting to ten million dollars.

Request urgently comment regarding this position or suggestions as to alternative.72

  1. Telegram 4779, Delsec 984, September 24, from Paris (from Matthews for Hickerson), expressed agreement with the proposed explanation to Hanc and added: “Tell him from here on out we intend to assist our friends.… You should add that we will sell surplus to the Czechoslovaks for cash on the barrelhead. We do not wish to give credits to them and thus leave ourselves open to the charge of ‘trying to enslave them with handouts’.” (740.00119 Council/9–2446)